Zedge's Q3 2025 Earnings Call: Unpacking Contradictions in Advertising Revenue, Restructuring Costs, and User Growth Strategies

TikTok's impact on advertising revenue, restructuring charges and cost savings, advertising revenue and TikTok impact, monthly active users and growth strategy, AI audio offering and market strategy are the key contradictions discussed in Zedge, Inc.'s latest 2025Q3 earnings call.



Revenue and Cost Management:
- Zedge, Inc. reported total revenue of $7.8 million in Q3, marking a return to growth with a 1.3% increase year-over-year.
- The growth was supported by a 46% increase in adjusted EBITDA and a $0.8 million free cash flow, driven by cost reduction initiatives including restructuring and lower marketing spend.

Subscription and Premium Revenue Growth:
- Zedge's subscription revenue rose by 13.4% year-over-year, with Zedge+ subscriber base growing to nearly 900,000, a 37% increase.
- Zedge Premium's gross transaction value grew by 4% year-over-year, contributing to a record average revenue per monthly active user of $0.10, up 33% from last year.

AI and New Initiatives:
- Zedge launched DataSeeds.AI, a B2B content marketplace, and signed an agreement with a leading global AI technology company.
- The company also announced the rollout of an AI audio generator as part of its pAInt suite, positioning Zedge as a leader in mobile personalization.

Strategic Restructuring and Cost Savings:
- Zedge implemented a global restructuring, leading to $4 million in annualized gross cost savings, contributing to profitability on a GAAP basis.
- The restructuring included closing operations in Norway and streamlining the GuruShots team, reducing discretionary spend and lowering marketing investments.

User Acquisition and Market Focus:
- The company focused on attracting and retaining higher lifetime value users, leading to a decline in overall MAU due to a mix shift towards higher LTV users in well-developed markets.
- Zedge expanded its investment in user acquisition for the Zedge Marketplace, yielding higher return on ad spend users and driving more revenue.